Department of Education's $140M contract for student loan debt collection awarded to Pioneer Credit Recovery
Contract Overview
Contract Amount: $139,716,602 ($139.7M)
Contractor: Pioneer Credit Recovery, Inc
Awarding Agency: Department of Education
Start Date: 2017-04-28
End Date: 2021-04-27
Contract Duration: 1,460 days
Daily Burn Rate: $95.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: "CRITICAL FUNCTION" - IGF::CT::IGF PRIVATE COLLECTION AGENCY PERFORMS COLLECTION AND ADMINISTRATIVE RESOLUTION ACTIVITIES ON DEBTS RESULTING FROM NON-PAYMENT OF STUDENT LOANS MADE UNDER THE VARIOUS FEDERAL STUDENT AID LOAN PROGRAMS.
Place of Performance
Location: ARCADE, WYOMING County, NEW YORK, 14009
State: New York Government Spending
Plain-Language Summary
Department of Education obligated $139.7 million to PIONEER CREDIT RECOVERY, INC for work described as: "CRITICAL FUNCTION" - IGF::CT::IGF PRIVATE COLLECTION AGENCY PERFORMS COLLECTION AND ADMINISTRATIVE RESOLUTION ACTIVITIES ON DEBTS RESULTING FROM NON-PAYMENT OF STUDENT LOANS MADE UNDER THE VARIOUS FEDERAL STUDENT AID LOAN PROGRAMS. Key points: 1. Pioneer Credit Recovery, Inc. holds a significant contract for critical federal student loan debt collection. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The firm fixed price contract type aims to control costs for the government. 4. The contract duration is four years, ending in April 2021.
Value Assessment
Rating: good
The contract value of $139.7 million over four years suggests a substantial investment in debt recovery services. Benchmarking against similar contracts for collection agencies would be necessary for a precise assessment, but the scale indicates a significant operational cost.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Awarded under full and open competition, this method allows all eligible vendors to bid, promoting price discovery and potentially leading to more competitive pricing. The use of a delivery order under a larger contract structure is common for ongoing services.
Taxpayer Impact: Effective debt collection services can lead to significant recovery of taxpayer funds lost to defaulted student loans, thus positively impacting the federal budget.
Public Impact
Impacts federal student loan program integrity by recovering defaulted debts. Affects individuals with defaulted federal student loans who will be contacted by the agency. Supports the financial health of federal student aid programs through debt recovery.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for aggressive collection tactics impacting borrowers.
- Reliance on a single vendor for a critical function.
Positive Signals
- Awarded through full and open competition.
- Firm fixed price contract type helps manage costs.
Sector Analysis
This contract falls under Miscellaneous Financial Investment Activities, specifically related to debt collection for federal student loans. The scale of the award suggests a significant market for such services, with potential for other agencies to utilize similar contracts.
Small Business Impact
The data indicates this contract was not awarded to a small business (ss: false, sb: false). This suggests that the scale and nature of the services required were likely beyond the capacity of most small businesses in this sector.
Oversight & Accountability
The Department of Education is the awarding and administrative agency, implying direct oversight. Further details on performance metrics, reporting requirements, and dispute resolution mechanisms would be needed to fully assess accountability.
Related Government Programs
- Miscellaneous Financial Investment Activities
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for borrower hardship due to aggressive collection.
- Vendor performance and recovery rate effectiveness.
- Compliance with federal debt collection regulations.
- Data security and privacy of borrower information.
Tags
miscellaneous-financial-investment-activ, department-of-education, ny, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $139.7 million to PIONEER CREDIT RECOVERY, INC. "CRITICAL FUNCTION" - IGF::CT::IGF PRIVATE COLLECTION AGENCY PERFORMS COLLECTION AND ADMINISTRATIVE RESOLUTION ACTIVITIES ON DEBTS RESULTING FROM NON-PAYMENT OF STUDENT LOANS MADE UNDER THE VARIOUS FEDERAL STUDENT AID LOAN PROGRAMS.
Who is the contractor on this award?
The obligated recipient is PIONEER CREDIT RECOVERY, INC.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $139.7 million.
What is the period of performance?
Start: 2017-04-28. End: 2021-04-27.
What is the historical success rate of Pioneer Credit Recovery in collecting federal student loan debt, and how does it compare to industry averages?
Assessing the success rate requires access to specific performance data not provided. However, comparing Pioneer's recovery rates against industry benchmarks for federal student loan collections would be crucial. This data would inform whether the contract is achieving optimal value for taxpayer investment and if the chosen vendor is performing effectively.
What are the specific performance standards and penalties in place to mitigate risks associated with aggressive collection practices by Pioneer Credit Recovery?
The contract likely includes performance standards and potentially penalties related to collection practices. Detailed review of the contract's Service Level Agreements (SLAs) and compliance clauses is necessary. This would clarify the mechanisms for ensuring ethical and effective debt collection while protecting borrower rights and preventing reputational damage to the government.
How does the cost-effectiveness of this contract compare to alternative methods of federal student loan debt recovery, such as in-house efforts or other collection agencies?
A comprehensive cost-effectiveness analysis would involve comparing the total cost of this contract (including administrative overhead) against the value of debts recovered. Benchmarking against the cost of internal collection efforts or other competitively procured contracts for similar services is essential. This comparison helps determine if outsourcing to Pioneer Credit Recovery represents the most financially prudent approach for the government.
Industry Classification
NAICS: Finance and Insurance › Other Financial Investment Activities › Miscellaneous Financial Investment Activities
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Navient Corporation
Address: 26 EDWARDS ST, ARCADE, NY, 14009
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $139,716,602
Exercised Options: $139,716,602
Current Obligation: $139,716,602
Actual Outlays: $91,184
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS23F0217K
IDV Type: FSS
Timeline
Start Date: 2017-04-28
Current End Date: 2021-04-27
Potential End Date: 2021-04-27 00:00:00
Last Modified: 2023-01-12
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